Gold market trades close to daily lows following disappointing May manufacturing sector survey by the Philadelphia Federal Reserve.
The regional central bank reported a decline in its manufacturing business outlook for May, dropping to 4.5 from April’s 15.5. This figure fell well below economists’ expectations, who anticipated a reading of 8 for the month.
According to the report, current general activity, new orders, and shipments all saw declines, with the latter two turning negative. Employment indicators showed an overall decline despite a rise in the employment index. Price indexes indicated increases but remained below long-run averages. Firms, however, anticipate growth over the next six months.
Gold prices plummeted to session lows immediately after the manufacturing data release, with spot gold trading at $2,381.82, down 0.16% on the day.
Major components of the index experienced substantial declines this month. New orders dropped from 12.2 to -7.9, marking the first negative reading since February, while shipments fell from 19.1 to -1.2, the first negative reading since January.
Despite a rise in employment indicators, overall employment declined, with the employment index rising to -7.9. The average workweek index improved but remained negative at -8.3.
Inflation pressures showed mixed results, with the prices paid index decreasing to 18.7 in May, while the current prices received index slightly increased to 6.6.
The Philly Fed noted softer regional manufacturing activity for May, with indications of a decline in employment and price indexes below long-run averages. However, expectations for future growth over the next six months remained widespread among surveyed firms.
